The statute applies to settlements, not verdicts. So in the case of settlements, yes, I would say there is no longer a need to take health insurer liens into consideration. With verdicts, the jury is asked to specify general and specific damages, so any award for expenses that were paid by health insurance would still be subject to subrogation. Larry Rogak

On November 13, Governor Cuomo signed into law an amendment to the General Obligations Law which further protects personal injury litigants from health insurance subrogation claims.

On 12 November 2009, General Obligations Law §5-335 was enacted to bar any benefit provider, such as an HMO or private health insurer, from seeking any reimbursement or subrogation against any settling party to a personal injury or wrongful death action with respect to benefits it may have paid or is obligated to pay. The only
exceptions are for claims for which there is a statutory right of reimbursement (e.g., Medicaid, Medicare, workers' compensation) and subrogation claims to recover excess no-fault benefits.

The new law directly overruled two Court of Appeals decisions,Teichman v. Community Hosp. Of Western Suffolk, 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (2009), to the extent they recognized non-statutory rights for reimbursement or subrogation against a settling party. That law applied both to future actions and all pending cases that had not settled or gone to trial as of 12 November 2009.APIP subrogation claims were specifically excluded from the parameters of the new law. APIP subrogation differs significantly from health insurance subrogation in that APIP recoveries are made from a tortfeasor's liability insurance policy.

The law also eliminated the exception under CPLR §4545 that barred a public employer sued by its employee from reducing a future lost earnings award by the amount of future pension benefits that plaintiff will receive (Iazzetti v. City of NY, 94 N.Y.2d 183, 701 N.Y.S.2d 332 [1999]). Under the new law, a public employer sued by its employee is
entitled to the same collateral source setoff for future benefits as all other defendants are already entitled to receive. Unlike the new GOL §5-335, this amendment to CPLR §4545 applies only to actions commenced on or after its effective date.

But in 2013, the United States District Court for the Eastern District of New York, in Wurtz v. Rawlings Co., LLC, 2013 WL1248631 (E.D.N.Y), has held that this legislation was preempted to the extent it applies to any insured employee benefit plan
covered by the Employee Retirement Income Security Act of 1974, as amended (ERISA).

To counteract the effect of the Wurtz decision, the New York Legislature has just amended GOL 5-101 and 5-335.

In the introduction to the amendments, the legislature stated that "the resolution and settlement of certain types of claims have been impeded as a result of health insurers' attempts to intervene into pending litigation, as well as similar attempts to institute subrogation and reimbursement actions against litigants. As a result, settlement of claims made by accident victims and others are imperiled and prevented, thus causing undue burdens and
pressures upon the court system. In addition, defendants in such actions are being subjected to claims made by health insurers, exposing them to additional liability."

"Chapter 494 of the laws of 2009 was enacted to add a new subdivision 4 to section 5-101 of the general obligations law and to add a new section 5-335 of
the general obligations law in relation to protecting parties to the settlement of a tort claim from certain unwarranted lien, reimbursement and subrogation claims. However, one federal court, the United States District Court for the Eastern District of New York, in Wurtz v. Rawlings Co., LLC, 2013 WL1248631 (E.D.N.Y), has held that this legislation was preempted to the extent it applies to any insured employee benefit plan covered by the Employee Retirement Income Security Act of 1974, as amended (ERISA). The instant legislation is intended
to make clear the original purpose of sections 5-101 and 5-335 of the general obligations law which is to ensure that insurers will not be able to claim or access any monies paid in settlement of a tort claim whether by way of a lien, a reimbursement claim, subrogation, or otherwise so that the burden of payment for health care services, disability payments, lost wage payments or any other benefits for the victims of torts will be borne by the insurer and not any party to a settlement of such a victim's tort claim. This law is specifically directed toward entities engaged in providing health insurance, thus falling under the "savings" clause contained in ERISA, which reserves to the states the right and the ability to regulate insurance."

The amended statutes provide as follows:

S 2. Subdivision 4 of section 5-101 of the general obligations law... is amended to
read as follows:

4. As used in section 5-335 of this article, the term "INSURER" means any INSURANCE COMPANY or other entity which provides for payment or reimbursement of health care expenses, health care services,disability payments, lost wage payments or any other benefits under a policy of insurance or AN INSURANCE contract with an individual or group.

S 3. Section 5-335 of the general obligations law... is amended to read as follows:

S 5-335. Limitation of reimbursement and subrogation claims in personal injury and wrongful death actions. (a) When a PERSON settles A CLAIM, WHETHER IN LITIGATION OR OTHERWISE, AGAINST one or more OTHER PERSONS for personal injuries, medical, dental, or podiatric malpractice, or wrongful death, it shall be conclusively presumed that the settlement does not include any compensation for the cost of health care services, loss of
earnings or other economic loss to the extent those losses or expenses have been or are obligated to be paid or reimbursed by AN INSURER. By entering into any such settlement, a PERSON shall not be deemed to have taken an action in derogation of any right of any INSURER that paid or is obligated to pay those losses or expenses; nor shall a PERSON'S entry into such settlement constitute a violation of any contract between the PERSON and such INSURER.

NO PERSON entering into such a settlement shall be subject to a subrogation claim or claim for reimbursement by AN INSURER and AN INSURER shall have no lien or right of subrogation or reimbursement against any such settling PERSON OR ANY OTHER PARTY TO SUCH A SETTLEMENT, with respect to those losses orexpenses that have been or are obligated to be paid or reimbursed by said INSURER.

(b) This section shall not apply to a subrogation claim for recovery of additional first-party benefits provided pursuant to article fifty-one of the insurance law. The term "additional first-party benefits", as used in this subdivision, shall have the same meaning given it insection 65-1.3 of title 11 of the codes, rules and regulations of the state of New York as of the effective date of this statute.

(C) THIS SECTION SHALL NOT APPLY TO A SUBROGATION OR
REIMBURSEMENTCLAIM FOR RECOVERY OF BENEFITS PROVIDED BY MEDICARE OR MEDICAID, SPECIFICALLY AUTHORIZED PURSUANT TO ARTICLE FIFTY-ONE OF THE INSURANCE LAW, ORPURSUANT TO A POLICY OF INSURANCE OR AN INSURANCE CONTRACT PROVIDING WORKERS' COMPENSATION BENEFITS.

S 4. This act shall take effect immediately and shall apply to allsettlements entered into on or after November 12, 2009.

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The newly amended statute eliminates the "ERISA-qualified" status of a health insurance policy as a means of avoiding New York's ban on health insurance subrogation. The subrogation rights of APIP insurers and basic PIP loss transfer are preserved.